Money Market/ Roth IRA.confusing!?
Answer:
Hello,
the question you're asking is not really related (ie. not one vs the other). "Money markets" is an elusive term depending on the reference. In general 'money markets" reference CD/bank deposits which yields a certain percentage (ie. you can invest in $1000 money market instructment such as a 1-year CD or money market mutual fund which will yield you around 4.25-4.50% in today’s market). And you can hold "money market" instructments in your IRA account.
A Roth IRA on the other hand is a type of investment account that you can open with a financial institution. Each year, you are given an allowance of $4000 to invest in a Traditional or Roth IRA. These investment accounts allow tax deferral until you hit retirement age (meaning that gains/income are not taxed year on year until withdrawal at retirement age). If you withdrawal these investments before retirement, IRS will penalize you (I believe 10%) AND tax you based on your total income for the year of withdrawal.
Also note that if you have a 401K plan with your employer, when you switch jobs, you have the option of rolling your 401K into a Rollover IRA account (which I suggest since IRAs give you more flexibility in investment instruments whereas most company’s 401K plans are limited to a group of selected mutual funds)
Also note that there is a difference b/w tax rules for Traditional vs Roth IRAs which you should understand before choosing which path to pursue. Any financial institution should be able to explain the difference to you if you ask them (or do a search on the internet).
Good luck. Good to see that you’re keen in planning for the future at your age.
HL
Put in 401k right away to get tax advantge and the company match.
with extra, put in Roth IRA. You are good to go on learn invest by yourself.
To consider invest in stock market, consider 4 things:fudamental analysis,technical analysis,sentiment analysis, and market cycle
Check out this book first: Traders ALMANAC by JEFF HIRSCH
Yes you could learn invest by yourself. it is your money, you should know how to do with it. for starter check this site out.
http://www.pathtoinvesting.org/index_fla.
http://www.stockcharts.com
http://www.streettalklive.com section university. a lot amount of information. It will serve you well
I accumulate in good amount in 401k at the young age.I could share with you. when consider invest in stock market. you should consider basic 3 things:
fundamental analysis==(economic data,finincial health, management, business model, competetion)>>what to buy
technical analysis==(chart+indicator)>> when to buy
Sentiment/schycho analysis==>>mood of investor, Contrarian point of view.
Market cycle===>> check out book Trader Almanac by jeff hirsch will give you inside stuff
When you combine 3 thing, It is one of the powerful knowledge goinh with you for the rest of your live
At the age of 32. my 401k is amassed 74,000.00 and 30000.00 in taxble account. by follow simple rule
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